Gnosis Chain has executed a governance-driven hard fork aimed at recovering funds that were frozen after the recent Balancer V2 exploit. The hard fork went live on December 22, 2025 and is part of a coordinated effort by the Gnosis community to return roughly $9.4 million in assets that had been frozen on the chain following the incident.
Whale Alert
🎯 Why the Hard Fork Was Needed
In a major DeFi exploit affecting Balancer V2 liquidity pools, attackers drained about $128 million across multiple chains. On Gnosis Chain, roughly $9.4 million of those funds were frozen through an emergency soft fork.
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To return funds to their rightful owners, the network’s operators agreed to execute a hard fork that modifies the protocol’s state to make the recovery possible a rare move in blockchain governance.
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⚠️ Validator Involvement & Penalties
Node operators (validators) were required to upgrade their software in time for the fork.
Those who do not follow the updated chain risk penalties, potentially including loss of staking rewards or even slashing (losing a portion of staked tokens).
Holder
🗣️ Community Debate
The recovery hard fork has stirred debate in the Gnosis ecosystem and broader crypto community about blockchain governance and immutability the idea that blockchain history should never be altered, even to correct thefts. Some stakeholders support the recovery as protecting users, while others warn it sets a precedent for changing chain history in response to hacks.
The Defiant
📉 Market Impact
According to reports around the announcement, the price of GNO experienced some short-term downward pressure (e.g., a ~3% move noted at the time of the announcement), reflecting mixed sentiment among investors on governance intervention."
